Advances in the capabilities of well drilling technology and other oilfield equipment have driven a dramatic increase in U.S. energy production in recent years. Consequently, producers and marketers have been hard-pressed to transport growing volumes of oil to their downstream customers.
With the capacity of the existing pipeline network falling short and no time to build new infrastructure, companies have been forced to rely on a growing number of trucks and trains to carry oil throughout the United States. However, even with these avenues available, producers are still pumping so much oil that new logistical choke points continue to emerge, which has left the industry searching for new options.
Earlier this month, at the Reuters Commodities Summit, a representative from Freepoint Commodities predicted that, next year, this burgeoning supply chain is going to hit the water.
"We think commodity merchants will increasingly need to look towards logistical solutions on the water in the Gulf of Mexico in 2014 to help move continued growth in U.S. shale oil," Freepoint strategy chief Brison Bickerton said at the conference.
Bickerton explained his firm is so confident that this is the next step in the so-called shale revolution that it has developed an inland barge operation, leased crude oil tanks in the Houston shipping channel and established other logistics operations along the Texas coastline. And the company is still "looking for more opportunities to get involved."
With downstream stakeholders taking action to eliminate transportation bottlenecks, producers will have a reason to keep striving to increase their output. Implementing modern solutions such as the hydraulic jet pump can help well operators maximize production from their properties.